Washington D.C. is slowly turning its attention to higher education. In December, on a party-line vote, the House Committee on Education and the Workforce released the PROSPER Act, a bill to update the Higher Education Act for the first time since 2008.

The Higher Education Act (HEA), first passed in 1965, outlines federal higher education policy, including federal financial aid eligibility, teacher preparation programs, and how the federal government holds colleges accountable. It has also historically been a barrier to innovation in higher education, something that the authors of the PROSPER Act are determined to remedy.

The path to an updated HEA will likely be long. The Senate Higher Education Labor and Pensions Committee (HELP) has been holding hearings on the HEA, and has signaled its intent to continue doing so. The full House hasn’t set a date to debate or vote on PROSPER, and some House members feel the process has already moved too quickly, without sufficient bipartisan debate.

But regardless of whether the process is long or short—and Washington D.C. can be unpredictable—Congress should keep innovation at the top of its higher education agenda. In our latest brief, Modernizing the HEA: Congressional priorities for innovation in higher education, I examine Congress’ critical role in encouraging innovation in order to help America meet the needs of the next generation. Here’s a summary:

America’s higher education system isn’t working

Technology is changing the nature of work in industries far from Silicon Valley, including manufacturing, healthcare, and retail. Studies estimate that nearly half of current jobs face a high risk of obsolescence caused by technology over the next few decades. Americans will need to be able to reskill and upskill in order to stay afloat in a hyper-competitive global economy.

Efforts to increase access to college are important. But so long as we have a system that is unaffordable and ineffective, increasing access to that system doesn’t solve America’s higher education problems. We need to radically rethink our higher education system.

The HEA has prioritized the status quo over students

The regulatory structures that should protect taxpayers and students, including HEA, but also accreditation and the Department of Education, fall short. They pay too much attention to the inputs of higher education—like faculty degrees and shared governance—and far too little to its outcomes—such as graduation rates or student employment outcomes.

As an example, the Department’s recent audit of WGU explicitly didn’t consider the school’s low student loan default rates, cheap tuition, strong student satisfaction, or healthy job placement rates. It did, however, ding the online, competency-based program for not having a “traditional” instructional model. Yet, WGU’s instructional model is specifically designed to meet the needs of its student body, and is part of what has driven the school’s strong outcomes.

Accreditation too has tended to prioritize inputs over student outcomes. Accreditors have pursued their own definitions of quality, focusing on the processes, plans, and procedures that colleges follow; but this definition does little to protect students and taxpayers from waste, abuse, and poor outcomes. Equally troubling, this focus on inputs, rather than outcomes, also deters, dissuades, and—in some cases—prevents colleges from innovating.

New models are demonstrating replicable successes

Innovators are rapidly iterating on models that have potential to lower costs and improve outcomes for students and the workforce. Some of these innovators are reinventing college degree programs within traditional institutions. Others are entrepreneurs developing models—like bootcamp programs and stackable microcredentials—that potentially compete with traditional college degrees. But what they have in common is that they are innovating around a new value proposition: helping students succeed in the workplace.

These new models have lessons to teach traditional higher education. But in order for these lessons to be adopted by more schools, and in order for their benefits to reach more students, Congress needs to act to unleash innovation in higher education.

What Congress can do to support innovation

Rethink regulation of online and competency-based education

Innovations in online and competency-based education have far outpaced the rules and regulations that govern them. The HEA’s definition of “distance education” dates from 1992, well before the online education market reached maturity. Competency-based education has never been defined in the HEA, and as such has been a square peg in a round regulatory hole.

The PROSPER Act takes steps to address the current shortcomings in the law. It addresses, but does not define, competency-based education. It removes the definition of distance education, and removes many of the double standards around online learning. But while the previous draft of the HEA wasn’t an effective check against waste, fraud, and abuse in online education, the PROSPER Act isn’t likely to be either. Further work should be done to define competency-based education and to provide outcomes-focused rules of the road.

Reform accreditation: Focus on outcomes, not inputs

Accreditors should be encouraged to focus primarily on whether institutions are creating value for students. Those that do so should be given wide latitude in how they do so. Institutions that do not create value for students should be heavily scrutinized, and the peer-review nature of accreditation could become a creative, collaborative tool to improve low-performing schools. Moving to assess the quality of all programs by focusing on outcomes—learning assessments, graduation rates, student employment outcomes, ability to repay loans, and student satisfaction—should level the playing field for online and competency-based education.

The PROSPER Act streamlines the burden on accreditors, getting rid of nearly a dozen federal accreditation standards. Instead, accreditors are asked to assess the success of institutions when it comes to outcomes and student learning relative to the mission of the school. But it also puts the onus on accreditors to scrutinize underperforming institutions more closely. These changes are largely positive, as they give accreditors more freedom to address innovative models and a more explicit obligation to address quality issues in the market.

Improve the basic data infrastructure of higher education

No market can function rationally without information on the value consumers do or do not reap. Moving to an individual student record could shed much-needed light on an industry that is bringing in half a trillion dollars each year and spending it in the dark. Collecting data at the student level, rather than at the level of the institution, could create tremendous benefits to institutions and regulators seeking to track whether their innovations are effectively moving the needle on student outcomes.

Representative Virginia Foxx, the Chairwoman of the House Committee on Education and the Workforce, has been an ardent privacy advocate and long time opponent of an individual student record system. Her views are reflected in the PROSPER Act, which takes other avenues to address data and accountability concerns. While these mechanisms are an improvement on current practices, an individual student record system continues to be the ideal solution to understand the paths that students take through higher education and how to best innovate against their needs.

Alana leads the Institute’s higher education research and works to find solutions for a more affordable system that better serves both students and employers. In this role, Alana analyzes disruptive forces changing the higher education landscape.

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